Unlocking Profit Potential in Texas Real Estate with Swarna and Prashi Mohan

What are you guys' pronunciation?

Swarna and Prachi.

Okay. What's up, you guys? Welcome back to the podcast, The New and Experienced Investor Podcast. We are the real estate podcast that brings investors from all walks of life together. So cool. I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

And I am Joe Homs. I'm the experienced guy. And sorry we were late. We had some technical difficulties.

Oh yeah. It reminds me back in my band days.

Oh, sweating over here.

Yeah.

Yeah. You haven't felt pressure till you have 1,000 people waiting for you to start your show and your computer just shuts down. And that's what all your stuff runs on. That is anxiety to another level. I missed it. Actually. So thank you. Thank you for that experience.

You're welcome.

Yeah. Well, the reason we had it is because we have some amazing guests, one here in studio and one calling in all the way from Texas. So, um, as you guys know, we haven't had any virtual guests yet. So this is like new waters for us. You know, we're gonna, we're gonna get it down. I do like the idea though, because then we can have other people come in from all around the world.

Yeah.

That's amazing.

Yeah.

Uh, we're gonna talk about some really cool stuff. Um, land development, real estate development, syndications. It's like monster deals. So I'm, I'm really excited.

Just like Texas. Everything's big in Texas.

Everything's big. Big money, big deals. We love that. So make sure you guys stick around. If you guys have any questions about that, we always want to encourage you. Jump in the chat. This is live. We're here right now, like right where you are and you're watching this. We are right here right now.

Well, we're here. They're there.

They're there. It's insane. Yeah, it's crazy. So you guys jump in the chat, make sure you push this episode out to any of your friends, any new and experienced investors in your life that you care about. Send them to them. Or even if they're your enemy and they're an investor, I guess.

I guess.

Yeah.

Okay. But before we bring them in, we want to talk about our meetup. That we have?

The 28th.

The 28th of October.

The 28th of October. And you're gonna be gone.

I will be in jolly old England.

Wow.

Yeah.

So it's just gonna be me, myself, and I. Yeah.

Yeah.

I need to get video of Joe setting up the PA. This is like my world colliding.

I'm gonna, I'm gonna try my best. We may have some technical difficulties, but, uh, I'll bring some help with me.

Yeah.

And I want to make it a total networking event, and we've done one before, and please come. And if I can embarrass you, I will.

Okay.

Okay, so please, please come with questions, especially you new people out there. And, uh, hopefully you're at ease enough to come up to the microphone and, yeah, tell us why you're there and what kind of help you need and We'll get the audience to sign a piece of paper with their information, and then you can reach out to them after the meetup.

Yeah, I think it was— I think people really enjoyed that last time because at first they were kind of weary, and it's usually the more outgoing people jump up, right? But then we— it was pretty much everybody got up there.

I had to pick on the— You had to pick on the ones that were hiding.

Yeah, yeah, exactly. They're like in the bushes.

Yeah, I got them out.

Yeah, yeah.

No, it was fun.

It was fun. Yeah. And, and from that, I think, um, You know, a few people partnered up. So you never know who you're going to meet at these things. So I encourage you come out there, get out of your comfort zone, introduce yourself, even if you're brand new. We have a bunch of brand new people.

Bunch.

Yeah. Which is which is nice.

Yeah.

So make sure you join join the party. But enough of that. Let's go ahead and bring our guests in. Let's see how this is going to go right now. Pretty excited.

Okay.

We have Prashy. In studio with us right now and signing in virtually, we have Swarna.

Hi.

Hi, how's it going?

Thank you. Thank you for having me in studio for— and part of your podcast. So I actually met Joe during the meetup and that was my first time attending the meetup. So like I said, great deals are made.

Yeah, dreams can happen.

Yes.

Well, thank you so much. Uh, can you, can you hear us out there in virtual land there?

Yes, I can hear you. Thank you so much for having us in. Do you guys hear me?

I can. All right.

Producer, is it possible to get her on the screen?

No, no, Joe, just stop asking for the world here.

Yeah, sorry.

Everyone can see her though, if you can see that screen.

Oh, they can?

Yeah, yeah.

Oh, okay.

Sorry.

Yeah, we can see her. We can see her. You look beautiful, by the way.

Yeah.

So, um, uh, maybe, maybe you guys can talk about whoever wants to jump in first. Um, you know, you guys are sisters doing real estate together. Kind of give us your background. Who started first? Uh, how'd you get into real estate? How did this all happen?

So Swana and I are actually like the title of this podcast or show. She is the experienced realtor who's been doing this for many years, have whole lot of deals under her bag. So I am the new one to the game. I'll let her go first.

Nice. Okay. So I actually came to America through engineering. So I did my engineering. I was working in the semiconductor industry, and that's how I landed in the US. I first came to Dallas, and I was working with the corporate industry for 10 years. But along, you know, while I was doing my engineering, I've always wanted to do something on my own. And I was investing in several properties, so I thought, why not take up real estate? Because definitely that was an area of interest. So I initially got my license in 2015, and that's how I quit my job and got the license. So it was full-time for me, and because I wanted to go all in. First 5 years I did more of residential real estate, then I felt I wanted something more creative, more, you know, out of the box, and commercial was that. Commercial real estate is what that did for me, and I was definitely intrigued. I took up classes, got my Texas accredited commercial specialist designation, and jumped all in. And since then I've done Land, retail, office development, a bunch of different things. And now I even do landlord rep and tenant rep, a lot of commercial leasing. Because what that did for me, it gave me a big perspective on every angle, because it's a, it's a supply chain, right? So, you start with development and then you're delivering a product which an investor is buying or an owner-occupied user is buying. It gave me a perspective for, you know, all the different niches of real estate. And I'm definitely enjoying it. Still a lot of learning for me, but I'm here to share.

I love that.

That's great.

Wow.

Yeah.

You came here to do engineering and then you get into real estate and then you catch the bug and then you just, you just ran with it. I love that.

She quit her job.

That's insane.

Wow.

I love how, yeah, and real estate's like one of the best paths to do that. Um, you know, I think so.

It is.

And then, and then, you know, most people do start in residential and then was it the, you said you wanted to, you know, kind of work on things that were outside of the box, but is it more of like the bigger payday as well that kind of drove you to do commercial?

Oh, I mean, yes, definitely. But it also takes a lot of patience. Your commercial deals are not the ones that close in 30 days or 45 days. They can go on for years. So, but definitely, you know, when you see the light at the end of the tunnel, it feels fulfilling for sure. But yes, it takes a lot of patience. It takes a lot of out-of-the-box thinking because when we work deals, there are sellers, buyers, financials, lenders, everybody wants different things. So, we have to get creative to see how to make all parties win because that's when you actually get the deal. the finish line and all parties feel, yes, you know, this is a deal I can win in and this is a deal I can make money out of. So, we have to take all their perspectives and see what each party wants and try to get creative with how we structure the deal.

Wow.

And so, your first deal was a retail center, you said?

Actually, my first deal was a land.

Oh.

So, it was a land that, I mean, this was in 2020. And 2021, and that was a time when Texas was really booming. Everything was going up, and there were a lot of buyers in the market who definitely wanted to buy land just out of speculation, not just for holding land banking. Land banking was huge in Texas during the 2021 and 2022. So my first deal was the land. It took about eight months to close, but then I learned a lot. Definitely, I learned all about the due diligence. all factors to look into, or how do you analyze a deal? How do you look at the financial feasibility depending on what the end use of that land would be and work out the analysis? I mean, analyze everything and present that to the client, make them feel comfortable about the deal, and negotiate. You know, of course, negotiation is a huge part of any deal. But to negotiate, you need to know what are the pluses and minuses of any property. property, right? And with commercial property, there's so many things that could go wrong if you don't know to ask the right questions, you don't get the right answers. So, it's all about knowing what to ask and what to look for. So, it was definitely a lot of learning. So, that was my first deal. Then, after that, I did a retail strip center that was way south of Texas in the Rio Grande Valley, close to the Mexico border in the city of McAllen.

Okay.

But it was a really nice deal. It was a brand new center, had multiple tenants, was stable, was definitely cash flow. And that was also when I got introduced into the syndication side, because my client who was buying the property, he and his friends and family were all investing together. And he asked me if I wanted to put in my commission as an investment. And in return, you get dividends, the cash flow, the rents that coming out of the property was all divided between the investors who invested in the property. So that's how I got introduced to the syndication side of things. And from there on, we have syndicated about 5 different projects, and we have about 300 to 400 investors who invest in our projects now.

My sister is a true Texan. She doesn't do anything small. Her first project, her land development project, is huge.

Oh my God.

And it's just getting bigger from there.

So, wow.

Wow.

What made you pick Texas in the first place?

I mean, it was my job. I came into Dallas first. 2 years I was there, then my husband's job moved us to Austin. And from 2008, I've been in Austin. And definitely Austin was the best place, best market out of all the metropolitan cities when Apple and Tesla announced their relocation. Austin just boomed. So, I was in the right place and had the right job. And it was definitely a lot of growth opportunity for me. And currently, I am a broker. I have my own real estate brokerage. We have about 63 agents. So, I also have my network of agents. That's my distribution system for any project that I do.

That's great. And so, Prachi, how did you come into Working with your sister?

So for me, actually, my background is in healthcare. So I've been over 15 years in the healthcare industry, primarily on the strategy and financial planning. Tried even— I got my doctoral program, tried a little bit on the academic side, came back to the consulting part. So when my sister started in her commercial projects, of course, she's family. I blind her. I trust her blindly. So I invested in the project. I saw it grow along with her growth, and that gave a lot of confidence and answered a lot of my questions as an investor.

Mm-hmm.

And then as she kept growing, I think in her more recent project, I definitely wanted to learn more as she got into bigger planning of bigger communities to see how some of these healthy communities came into play. So I told her, I'm going to be a cool aunt for all your projects. So if they are our babies, I'm going to learn more about them, learn all about them, in fact. Pitch in whenever I can. So I pitch in with some of the structuring of our deals, legal reviews or financial modeling, or some of our outreach, and just enjoy it grow.

Wow, that's so cool that you guys can, you know, anytime you can work with your family and it, it works out, that's, that's great.

Yes.

So, um, can you go over, I guess, some of the, the upcoming projects or anything that you're working on currently?

Sure. Uh, Swana, you want to go first?

Uh, so, uh, the projects— I mean, I currently have 4 projects going on in Austin Metro, and I have 1 project in Dallas Metro. So the projects in Austin that are nearing completion, we started these in 2021. One is a residential master-planned community in a suburb of Austin called Manor. And it's about 550 acres. We brought in a developer partner and they are helping us get the entitlement and plan the community. So basically we are working with the City of Maynard to get permits for, you know, building this huge community. It's about 4,000 homes. It's a pretty high dense community. It has 2 lagoons and a couple of man-made lakes. They're planning a 100-acre park similar to New York's Central Park. Central Park site. So that's one of the big projects for Maynard. So Maynard City wants our project. They feel very good about it. We're kind of working with them. It also has a wellness aspect to it. So the developer that I work with, they— one of their partners is a company called Daylo, which works on air filtration, water filtration systems. And they did a lot of research in how to control the indoor air quality, light, Everything so that it makes it a healthy living, healthy lifestyle for the residents. So all that research is backed up by, you know, is certified by this Mayo Clinic. So they created a wellness certification, just like energy certification. So this community will have a lot of wellness aspects to it. So all the buildings will have all those wellness features. So that's one of its kind in the entire US. You don't have any other community like that. So we definitely, we had a lot of vision. We went in it, and right now we are very close to getting the permits. So that's one project. And the second project that I've been working on nearing completion is in another suburb called Cedar Park. That's where I used to live in. It's a very well-established neighborhood. We got about 7 acres of land. We got permits for 78,000 square feet of commercial condos, retail, and flex. office condos. And we are right about to break ground, start construction. So, we're going to start presales activities. We're going to sell these commercial condos to investors or owner-occupied users and help to lease it for them. That's the other project that's, you know, nearing completion. The biggest of all, that is our Dallas project. We have assembled about 1,600 acres. in a suburb of Dallas. And we are— we've already created a vision to bring in amenities like Crystal Lagoon. Crystal Lagoon is one of the top amenities that a lot of communities all around the US, not only US, all around the world, they are implementing just to attract people. It's like a man-made beach and it gives— it has that effect of, you know, you're staying close to a Caribbean beach, very blue turquoise waters. But it also creates an activity center, especially after COVID. People all like to gather around a common area and, you know, hang out and spend time with their families and relatives. The crystal lagoon is one of those amenities that can bring people together. So we are trying to bring that amenity into our project.

Can I ask you something? Is government a help or a hindrance to you?

I mean, they have their challenges, but I also understand what is— where their challenges are coming from. Especially when I started working with developers, builders, cities, and how— I mean, different investors, I saw cities had their own challenges because they'll have infrastructures, right? So they have only limited infrastructure and they have to figure out which projects they can allow those infrastructure to be utilized, especially water and sewer. I mean, in Texas, water and sewer is a big— it's only limited availability. It's not available for every project. And plus, it takes a lot of time and money to build additional infrastructure. So when we work with the city, we're always trying to understand what their challenges are. And when we align our goals with them, we can work together. But when you have different goals, that's when you start feeling that it's sort of a hindrance.

So when Obama was president, he, uh, to stir the economy up, he was giving everybody $10,000. to buy a house. And there's talk about that again with, uh, I won't say her name, but, uh, talk about that again. How does that help at all you? I mean, you're building out a community.

Um, so I think, uh, I mean, if I may, and I'll— Swana, I'll let you go after this. So I think a lot of her sales is more, uh, at this point B2B also. So when she's doing these master-planned communities working with developers, at least the exit option for her investors are when she's selling to some of these bigger existing real estate houses or the construction companies who then build the actual houses and sell it to retail. So I think at least, yes, on the commercial land project side, that would not directly translate into her or impact or hindrance her sales. But I guess I think for every realtor in the country, then it's a point to this point of contention, right? How is that going to help?

Okay, so she's, she's basically developing and then selling it to the construction companies who build the ground up, and then they're— they have their sales who, you know, sell directly to the consumer.

Yes, uh, on the land development projects, right? So of course she has her other spectrum of the residential and, uh, commercial buildings.

Sure.

Sorry, it's been land development pretty much, uh, The biggest uncertainty or the risk factor is the entitlement, because when you're working with the city, you're not sure what kind of permits you can get. So a lot of times that is where there's a lot of uncertainty. So you have to— it takes time also. Any, uh, master-planned community or a project that's 100+ acres takes at least 4 to 5 years, or sometimes even 7 years, to get all these permits. So you have to know what you're doing. Because, you know, the cities are always going back and forth, and when they are looking at several projects, they have to know, they have to understand what you're looking for, and they have to support you. So there's a lot of— and there's a lot of people involved. You have engineers, you have zoning attorneys, you have city planners, you have city-side people and the developer-side people. Then there's financials. So, I mean, lenders who are, you know, uh, supporting the project. So everybody is time constrained and they have to work together. So it takes a lot of micromanagement also, you know, managing the project, managing the interactions with different parties to get to the finish line. So yes, you know, so when once you get the permit, at least you know what, what's going to come up, what you're going to build. Then from there on, the uncertainty is taken off. From there on, it's pretty much, you know, going vertical, constructing, building the roads, building the utility lines. And build, uh, you know, selling it to the builder, selling finished lots. Or if you are into vertical construction, you can also build the homes and sell it to the end consumer. So that's how the whole supply chain works.

Wow. So could it be like one guy— there's always like one guy, everyone's okay with it, and then one guy in like city hall or something has a problem with a project and it just ties it up for a while?

I mean, they do go off of majority vote.

Okay, good.

It's not one person who can stop. So usually there are about 5 to 7 council members and they take a majority vote. And it does get political at certain stages because at that point it's more of lobbying and where you are explaining your vision. I mean, a lot of times when, when these councillors or the city folks understand your vision and it is something that they feel is good for the city, they're not going to stand in the way because these are people from the community. They usually Voted, or, you know, they are from the community, so they want the best for the community. And so when we do a project and when we are going for permits, we also do some sort of lobbying. Hence, we explain to these different councillors what our vision is, what, what do we think, how this project can help the city, what is it going to do for the city. So, and when we try to explain it in a way they feel good about it, that's when, you know, they want your project. And, and that's what we work on. So it does take some amount of lobbying and, you know, explaining your vision and making it that it gets across to them, making sure that it gets across.

Are you doing these like, are you explaining it at like a high-end dinner?

Cocktails.

That's what I picture.

Party, smoke-filled room.

Yep.

Yeah, we were thinking the same thing. Yeah.

Yeah. Cigar lounge.

Yeah, cigar lounge.

Is Texas—

oh, okay, it's a city meeting.

Is Texas the only place that you're doing this? You haven't been to any other state to do this?

Uh, yeah, so I think a majority of my, uh— the question is, is Texas the only place you're doing this? So I think majority of our projects currently are in Texas.

Okay.

We were exploring some retail centers in other states, but right now the biggest focus is Texas.

Yeah.

So, yeah, land development is very localized, right? Because you have to understand the dynamics of everything that's happening in that area. So that's why I feel for land development, local knowledge and understanding of what's the limitation or what, what could be the bottlenecks is huge. So those projects, we have stayed within Texas. But any sort of investment purchases like retail strip center, offices, Oh, cash income-producing properties, you can. We have expanded out of state. We have invested in centers outside of Texas as well.

Okay. Yeah, I was going to ask that. So you see a blank parcel of land in an urban area, how do you— I guess you answered it right there. You have to know what everybody's looking for, but how do you decide between a flex space, maybe luxury apartments, or just a community? How do you decide that?

See, that's my favorite part of buying land because it's like almost like, you know, you can envision something. I mean, actually coming up with a vision and, and that's my creative side. It appeals to my creative side when I look at a piece of land. Okay, what can I do? But a lot of it coming to the, you know, the facts, a lot of it depends on— a lot of the cities have something called land use maps and future land use maps. So, when you go into the city website, you start looking at the land use maps, Pretty much it gives you an idea what the city is allocating that particular area for. Is it more of an industrial or a commercial, or would it suit a residential space? Then another analysis that we do is the highest and best use. Okay, what can I put on the land that lends itself to its highest and best use, which means makes it the most profitable? Would it be a residential community? Would it be a commercial development? Would it be a specialty use like hotel or— Uh, or would it be an industrial complex? So you look at both those factors, and that's how you start putting a vision together. Plus, it also matters if the land is within the city limits or outside of city limits. For example, in Texas, earlier this year, they passed a law saying if you are in the ETJ, which is outside of city limits, you can opt yourself outside of, uh, off the city ETJ so that you work with the county. Then you don't even have to work with the city on permits. Why that was huge for a lot of the developers was because when they opted out of ETJ, no longer they are— they come under the purview of the city code. City code is usually more stricter than county code. Counties are a little less relaxed, relaxing on their zoning and restrictions. So, uh, you know, when developers could opt out of ETJ and figure out their own utilities, a lot of developers started doing that. You know, they didn't want to— want the hassle of working with the city. Okay.

I mean, yeah, the permitting process just freaks me out. So I, you must have like a pretty, I guess, thick skin and then a threshold for, you know, just getting bad news back from the city or the county.

I mean, yes, it takes a lot of patience and Like you said, thick skin for sure. But then it also gives us opportunity to think creatively. Okay, what can I do? What can I come up out of the box here? Or how do I, you know, put pressure on certain things that, you know, I can get this through? Or how can I think differently or do something differently to make this work? So yes, you know, we do, it takes a lot of effort to get through all that.

Yeah, so outside of all the serious concerns that she had, the first question I had for her is, can I come up with names for the roads and streets in the community? That would've been a cool job.

Yeah.

But I don't think I got it, at least for our first project.

So yeah. I always do wonder how they come up with that. Like we were talking about that the other day. There's, there's a section in Lake Forest where it's all birds.

Yeah.

And then it's all like girls.

Yeah. Girls' names.

I really did think about that.

So your first, your first foray in investing with your sister, what, what was that like? Uh, can you talk about like, That was an investment deal, correct?

Yes.

Okay, can you talk about that?

So, uh, I, I think I, compared to a lot of investors, I've been open to investing in land for a longer time because, uh, actually, uh, our mother in India does very similar work. She does land development projects. So real estate and investing in land and knowing the value of land has been kind of always, uh, a talk around the house which we hear. So I've always been open to it. And when she got into it, yes, of course I have my concerns knowing that, like you said, right, if my first concern would be what if the city doesn't give permits, then the whole thing kind of tanks. But you still have the land. It's not a depreciating asset, but you still have it sitting there. So it's not something that can go down too much was kind of my always assurance compared to investing in other liquid assets, which can always go— I mean, right now, given the volatility, especially right now. So that was kind of my assurance. And of course, I think in real estate, knowing about my sister, I know she's extremely hardworking, she's extremely smart. And what I do know about her is I really value in her when it comes to real estate deals is she has a very high integrity. So knowing that it's someone I trust and knowing that there are risks, but it's still comparably safer than some of the other investments. I think that was what made me kind of invest in her first, and then seeing her growth in it was what made me invest again with her. And now in her latest biggest project in Greenville, I invested in phase one and again in phase two, knowing that yes, there are challenges. But I, like she said, I see her tackling it head on and or approach it without of box thinking. So I know that yeah, she's. putting the work. So if there's anything— if there's anyone else in real estate I want to invest with, that's where I think I take the comfort, uh, for me.

So how early do you get into the project, and what is the timeline?

Uh, for as an investor?

Yes, as an investor.

So as an investor, I think, uh, no, I mean, knowing that her current project, I've been involved from day one when they've identified the land. But my previous projects as an investor I think even before they reach out to the investors, there's a lot of homework into it, right? Like she said, what is the land? By then, at least they make sure they have a contract with the seller of the land so that— and then there's always how is the city, what does it want, what can we develop, what type of nearby roadways or projects is the city planning? So what's the growth potential in this area? And then again, what can we build here? Can it be residential, a mixed-use, a master-planned community? And I think with her projects getting bigger and bigger, I also realized that there is always a level of secrecy also involved in it. You have the land, you know it's going under development. You do not want the nearby land parcel owners to know that it's coming up to limiting your options to expansion. So the investors come in when they've already done all this homework, and they are able to at least project some returns in terms of, okay, what's the floodplains? How much land do we lose? What's the efficiency of building and then projecting? So when, as an investor, when I participated, she was able to clearly say that this is how we are going to model this land, this is how we are going to plan for it, this is what we can expect, and the timeline. And of course, there are always risks to it. But of course, given they were very clear with, okay, these are the— this is the timeline for my planning, for drawing up the site plans. This is the timeline for getting the permits. This is the time for exiting. And these are our exit options and these are our returns that we can get out of this.

Yeah. And that's what I was kind of getting into. So when she presents you with an opportunity, does she say, you know, you're looking at leaving your money in here for 5 years, 7 years, 10 years. What does that look like?

So I think on average her projects has been around 4 years, knowing that, okay, because again, like I said, they— her exit plan has been more to pre-sell as paper lots to others. So there's literally no construction happening at that point, which is going to delay it further, right? So most of our projects, the exit timeline has been around— we— the aim target has always been 3 to 4 years. 4 years more so, given all the different things. But, uh, the exit— I think the ideal exit point would be at 4 years.

Okay. And you said something very interesting about, uh, secrecy, and, and I understand all that. Um, and I know you didn't grow up in this country, so— but you must know Disneyland.

Yes.

Okay. Um, do you know how she's acquiring these properties, and is it just one big parcel of land, or does she have to buy it from different owners and put it together? How does she do that?

So that actually is a very interesting change I saw between what my mother did in India and what she's doing here. So yes, she is accumulating land from different landowners, but the parcels here are still huge. There are some parcels which can be 20, 30 acres, which are actually small for a development project. And there are parcels which go up to 800 acres too. In comparison, I think India, where you have division of plot over generations, it's all really tiny plots. So there's a lot more timeline and struggle with just the buying of the plots to build it enough for a land development project. Oh, wow.

And my question with, with Disney, and maybe she can answer it, when Disney decided to build Disneyland in Florida, He started buying up little parcels of land, trying to put everything together. But what he was using was an instrument called the land trust. And the reason he was doing that is because the land trust, you can name it whatever you want. That's the owner of the property. And then inside the document is Disney.

Disney.

But nobody had access to all that stuff. So he could go buy something from a producer and then go over to Alex Next door and say, hey, I want to buy yours. But nobody would know it was really Disney buying that land and putting it together. Um, and that's how, that's how he did it. Then once he had everything together, then, you know, obviously he put it under the Disney Corporation. But how does she buy this land?

Yes, uh, I, I— Swana, go ahead. I, I think you are the one who's talking to the sellers there.

So, I mean, So that is where syndication comes into picture. So when we are buying land, I mean, initially when in Greenville, the reason we have Phase 1, Phase 2, Phase 3 is when we bought the land, it was 400 acres. Our vision was just to have the project on 400 acres. We brought in this developer partner, and as we started studying the area more, we realized that, you know, having a bigger community and bringing in some amenities like Crystal Lagoon And in fact, we are even in talks with a 5-star brand to do 5-star resort branded residences in the project. We decided we needed more acreage. So then the phase 1, when we had the land under contract, once we have a land under contract, we put a vision, we put an exit plan, we kind of estimate the return, and we go to investors saying, okay, we are buying this land, we are raising this money to buy this land. And then we pitch that to all the investors, and whoever's interested, they'll sign up with us. And then we also have a way to invest their IRA funds into our investment opportunity. So we form an LLC, and all the investors are under this LLC. So they hold shares in the LLC, which holds the land. So that's how we structure the deal. So that's phase 1. And once we decided to add more land, and we had another land come up, we put that under contract. We created a separate LLC for that, and then investors invested into that land, buying that land. So our investors hold the land, you know, they own the land, and we put a joint venture with the developer partner. So we have a developer partner who comes in, he works on the entitlement process, and he spends his money to do all the entitlement work. Our job is only to buy, hold the land, so that way our investors are not incurring any additional costs. All the additional costs are spent by the developer, and he brings in his funds, gets the entitlement. And then once we get the entitlement, we can sell the land and we split the profit 50/50. So in the event, let's say something doesn't work out, we still hold the land free and clear. There is no lien on the land, and that's how we set up. We don't have any lien on the land because when you have lien on the land, that's when uncertainty comes into picture. Your costs go up. So, and we were also able to buy the land at a really good price. So that's why we decided we'll just do all cash deal and buy the land and, you know, contribute it towards the joint venture, which is going to get the entitlement. That's how we structure it.

So I think, yes, we buy these individual parcels under the name of LLC, right? But to answer your point, these are all in suburbs or smaller cities where everyone knows every other. So you're calling, asking for land prices. They know, okay, this LLC just bought that. Somebody is asking me for prices. So that's where it comes. Yes. In Disney's case, it was probably the trust versus Disney. Yeah, this is— thank you for educating me about it. But yes, I think in smaller communities, that's where— I'm not saying it's everything under— it's something which is not documented. It's just that when you suddenly see more people calling you about a land or a price or something, then people get— pay more attention to it as to what's going on.

Even buying it in an LLC. then like you just said, if I'm calling Alex and then, you know, Lauren, and I say I'm representing this LLC, they're neighbors, they're talking, you know. And then, and then, you know, the price is starting to go up because they're like talking. And, and that's why I think, uh, Disney used a land trust, because you could name the land trust whatever you want. And then the next parcel, it's a totally different name. So, you know, yes, I'm not buying for Disney, I'm not buying for I'm buying for land trust number 1.

Yes.

And then the next one, land trust number 2 or 10 or whatever. And nobody has any idea who owns these properties and stuff. And I know Texas is a pretty private state. Um, you know, a lot of people incorporate in Texas and stuff, but, uh, it's always been my concern. And I, and I love what she said about the investors, uh, owning the land. That, that's awesome.

Yes.

Yeah. Yes. That, that warms my heart.

Yeah.

Yeah.

That seems like the right way to do it.

Yeah. It's not, I'm not just giving money to you and your sister, which, you know, I trust, but correct. Yeah. There's, there's something there to back it up.

So yeah, like I said, the land is always going to be there.

So yeah.

Yes. Mm-hmm. And I, I, I think that's what makes it more appealing to me at least.

Yeah, me too.

So are some of these off market or is it like, how are you doing the acquisitions of the land? Is it off-market or is it brokers or—

Most of the deals are off-market.

Okay.

Because, you know, the ones that are on market, again, a lot of, especially in Texas where though it's a non-disclosure state, everybody talks. And through, you know, channels, people know what prices somebody's selling for or what price somebody is buying for. So, we try to go usually off-market. That way, you know, people are not Right. Speculating on figuring out and raise the prices on that. So we try to do off-market. But of course, in Greenville or in Maynard, when we started assembling land, the first land deal was off-market. After that, we approached the seller saying, are you looking to sell your land? Are you interested? And if they are, or through channels we hear that, oh, the neighboring landowner is also looking to sell. And then we approach them and we do that deal even before they hit the market or, you know, they're hiring a broker. Sometimes we have directly worked with the seller. We don't even go through brokers.

Good for you.

Nice.

That's what Alex does.

I know. Yeah. So what do you— do you have somebody that does that that's a part of your team, or are you doing direct mail, or how are you getting in touch with these people?

Um, yes, you know, I mean, I'm a broker too, so I have access to A lot of different tools. So, I'm always— and especially when I started investing in commercial, definitely you don't have one database like an MLS where everything is consolidated, right? In commercial, your data is spread out between different resources. So, you should know who to approach. So, sometimes we approach a local agent, you know, who can help us connect with the sellers. Sometimes we are just looking up the county appraisal records. Trying to Google who the seller is, trying to dig in and find that information and send them an email or call them directly and figure out, identify, you know, if they are looking to sell.

That's amazing. I love that.

That's you too.

I know, it's just across the board.

You're just, you're just buying single-family stuff. You're not buying—

I need to start buying by 1,000 houses now.

No, land.

Land. Yeah, that's so cool. And I love that you're not even doing the development part because that part seems insane as well, you know, doing all the ground up, and then you got to have the inspectors come out. Nobody likes an inspector.

You don't like inspectors?

I'm just done with these guys. That's too much power for one person. Um, yeah. And what is it like? I mean, do you have to end up befriending the people in the city, and how do you Party time. Grease the palms.

Yeah.

Is there any way to like make the process go smoother?

Sorry, could you repeat that again?

Sorry, it was kind of a joke question, but, um, I guess over as you're doing more and more development, you be— do you have a working relationship with the people in the city? And then does the next project get easier because they know who you are and what you can per— and how you perform and, you know, all that kind of stuff?

Yeah, that, that definitely happens. Yes, when you're working with the city, um, see, a lot of times when, whenever, when you're working with the city, 50% of the work is knowing the right person to contact. Because on city websites you may have a bunch of names and you don't know what their title is or what their role is or what, which department or what are they handling. So when we start working with the city, you already know who's who. And when you know who's who in the city different departments, and when you have a problem, you know who to reach and get an answer immediately. So that does definitely save a lot of time too. For example, as simple as leasing, commercial leasing, we do a lot of landlord rep and tenant rep. And so when we have a tenant looking for a specific use, we directly approach the contacts in city asking them, oh, we have a tenant for this use, do you think this space would work for it? What would be the parking requirements? Do you think we can get a permit for their business, and this is something that will be an acceptable use. The city will right away tell us what we need to do, and that tells us whether that space is going to work for our tenant or not. So yes, uh, just knowing, you know, when you work with the city, you kind of identify who's who, and that helps a lot when you're doing your next project.

Knowing that your mom does this back in India, um, is there a difference with what she does back there and what you do here? Because I have a story for you, but do you have an answer?

Yeah, I can. I mean, definitely it's a lot harder in India. In India, nothing is structured. Everything and the documentation is not online. Everything is just still paper and a lot of family trail, the heirs and who's the right heir, you know, that is not documented well. So a lot of times she has to understand the family history and the family tree for her to go get to a deal. So she's poring over all these documentation from the '50s and '40s and '30s just to understand who's the right heir for the land. And that's what— so it's much more harder for her.

Yeah.

Here I feel at least a lot of the things, you have the title companies which make your work so much easier. They're going to tell you if you have a title issue or who are the right owners of the land.

So when she's doing a project, does she do like, you know, like you've been describing, you know, building out a bunch of homes? Does she do that?

She does the same. So wherein she works with the city, she, she, she buys land from different sellers. So and for each of the sellers, she actually has a family tree to know that every person who's entitled to the land signs the documentation. So she buys all these smaller parcels. gets, uh, big enough to develop a community, works with the city in zoning and laying, uh, getting a site plan ready for the roads, the common areas.

Okay, I'm getting to my story here.

Okay, um, go ahead.

Does she, uh, what, what does she have to do over there that may be like totally different here as far as, uh, working with people? And, and like Alex was saying, um, Is there a party going on to, you know, or is there some sort of, let's say it, payment?

Gifts.

Gifts. We call them donations, gifts.

So I think in the sense, like, I don't see that much partying in India, but definitely working with the local officials. And it's not just the local officials, because a lot of the time those are villages, right, from which he's trying to So it's also the unofficial leader there. And also, okay, if I have to buy land and all the villagers must accept the project coming up, do I build a school here now for the villagers? What do I do in return? How do I make sure the local villager will get elected next time? So how do I convince him? So it's a lot more of that negotiation and back and forth. Definitely not the wine and dine that I've seen there. Like, yeah.

Okay, my story. I met with a gentleman from India a few years back, and he was here in this country. He came on an H-1B visa, okay, which you have to employ people under you and stuff like that. And that's what he did back there. He was a builder back there. He says, Joe, I want to like buy some land and develop it and build it. I want— I need to hire at least 10 people underneath me and I go, okay. He goes, well, when I'm— he asked me, he goes, when I'm building stuff like back there, if the inspector came over, uh, he expected me to pay him at that point in time. You know, that's just the way they did back there. I don't know if that's what they're still doing, but then I'm listening to this and going, oh my God, sorry, you're in America. We don't do like upfront stuff. Okay. Yeah, we don't, we don't do cash and You know, changing of cash in hand and stuff. But, uh, not anymore. Yeah, no, no. So I, I go, yeah, that, that should probably change for you, you know, kind of. Yeah, the inspector is the inspector, and they're all a pain in the neck, but it's not like you want to pay them off to do something different.

Sometimes that might be easier.

Oh, it's totally easier. You can just give a guy $1,000. That'll be way easier.

Yeah.

But, you know, we were kind of exploring the differences between, you know, and, and I told him, I said, that's not the first time I've heard this. I mean, there's more countries out there that do it the way that India does it.

I know.

You know, it's like, okay, I've got to pay the inspector, but before I pay him, I've got to pay his boss to send him over. And then before that, his boss, the money I give him, has to pay his boss. And money kind of flows that way, you know.

I think any sector where it's fully on paper, there's no clear demarcation, all that is rampant. But I think it's also, yes, that if you know, need, I mean, if you know how to work the system, there are ways you can do it with less of off-the-table deals. But I think there's any system where there's still a lot of huge reliance on paper documentation and which are not structured, that's going to be a part of it. So.

Do you like our way of doing things or India's way?

There's pros and cons to both. Like I said.

Yeah, I guess it depends where you're at.

Yeah.

You know?

Yeah. And I think no matter where you are, if you know how to work the system, like here, you need to know your councilor, the city council, your background, what speaks to them. Same things in India. So no matter where you are, I think if If you understand the community, the people, and how to work them, uh, how to work with them.

Yes.

So I think it's easier to get things done.

So you guys were— has your mom been doing this like since you guys were little, or did she get into it later?

I, I think she was for a long time trying to broker residential again, and then, uh, I, I think at least in— of the people I know, she was one of the first Female realtors at that time.

Oh cool!

So she broke down a lot of barriers, and that she's always been a role model for us in that. And then I think she took a huge risk when we were in college to get get into this land development piece of it.

I love that you guys are you know carrying the torch. You know that's that's great.

Nice.

That's so cool. How can people get involved in upcoming projects?

Well, Swana, you want to go ahead?

Yeah, I mean, I, uh, so they can reach out. I have a portal where we have— I have a website where we have outlined all the projects that we are working on, what's ongoing, and where we have closed for capital raise. It's called prosperpulse.capital. That's the name of the website, and that's the name of the syndication company that I have. And so that's one way to reach out. You will find my information, my sister's information on the website. So it's prosperpulse.capital. Yep.

And I can give you, if you want, our email IDs or contact email.

Yeah.

Email IDs if you want to post it in the video.

Yeah, sure. Yeah, we'll put it in the show notes.

That's really cool. Do you do Instagram? Because everybody, everybody, the sister does Instagram. So yeah, tell them what your Instagram is. Because that's what young people use to reach out to each other nowadays.

Instagram.

Do you have an Instagram?

I have my personal one. My sister's company has it. Yeah, we'll give you the handle if you want to put it.

Yeah.

Okay, what is it? What is it? Just say it. And what is the IG? What's the company IG?

Swana Full Circle IG.

Yeah, I'll, I'll— so my email ID is Swarna?

Uh, no, the Instagram handle. They wanted the Instagram handle.

Instagram handle is Swarna Mohan Realtor.

Nice, that's good.

Thank you.

Perfect. Um, we have videos that we normally show. I don't know how this works on Swarna's end. Um, let's try one. So normally we'll play a video and then have you guys react. Um, Let us know if you can hear it or see it. I don't know what's— what you're seeing on your end.

I don't remember if I saw anything when I was doing the Zoom part.

Uh, okay, well, we'll try one and then you let us know. See, let me know if you can even hear this or see it.

Okay.

Okay, this is the pros and cons of land development.

Gosh dang it. Yeah, I can't hear it. And the wording on the screen, I don't see it, but here.

Okay. So she can't hear the audio from the video, but—

Okay.

Yeah, um, it was just basically the pros and cons of land development. Um, Prachi, you want to maybe comment on that?

Sure. I, I, I think I, I definitely agree with the pros and cons based on what I've been hearing from all our projects over the last couple of years. I definitely Agree. You really need to know what you're doing. You need to know how to work with the city, with the county. You need to make sure the land is in the right place. Otherwise, it is a huge investment which is just going to end up as land. So you really need to know what you're doing. But if you do know it, it can be super lucrative. So I definitely agree with that part too. All right.

Got my attention. Okay. Very cool. How—

videos might be a little tough, so—

No, no, we don't do the— I just wanted to— yeah, we try. We're not doing the videos anymore. Um, how— okay, so, uh, Swarna went from retail to the land development. Uh, what's the best path for a complete noob to get into this? You know, if they want to learn how to do this, what— like, what is— are there, are there, um, mentorships? Is there a certain YouTube channel? What would you suggest?

So I would— I mean, if, uh, definitely commercial is a different type of investment compared to residential. It has its own, uh, it— you need to have a different mindset because commercial assets are usually considered less liquid than residential assets. So if somebody wants to get into commercial, definitely start off with something that's income-producing, like a commercial condo, retail, know, a flex office, something that's already income-producing, because you start with the end of the supply chain and work your way backwards. Because once you know how the end product works, how you make income out of it, then from there on you can work— reverse engineer your way back into development, because then that gives you an insight on, okay, I can make this much of income or this much of cash from a product like this. Now how much does it cost me to build it? And then you start, okay, if I— it cost me this much to build it, should I buy an existing building or should I buy land and then, you know, get the permits and then build it? So you work your way backwards. I think that's what I would definitely recommend. And yes, definitely mentorship. You want to talk to people who have done it, who have gone through it, gone through the cycles of it so that they can give you, okay, what to watch out for and what need to look out for to have a successful project or successful investment. So definitely talking to people, having a mentor is going to help you.

And one thing I've seen, at least like Swarna growing over the years, is she doesn't try to get the max out of a deal. As long as she learns something, she gets a reasonable amount, she gets into the deal, gets the experience, goes on to the next bigger deal. So she's not trying to like squeeze everything out of a deal. And I think that's why I've seen a lot more people open to partnering with her and she's growing a lot more with more projects under her belt at this point.

So that is— that's a mindset I think can just, just be in real estate in general because even with like the wholesale deals or the flip deals, we've had people approach us or like, you know, talk about possibly partnering and then you hear them They're trying to get rich off this one deal. And just that mindset, you're like, no, you need to be doing multiple deals, get the volume, get the experience. And then just like you said, learn from the last one and be better on the next one. So I love that. That's a great mindset to have. Producer, do we have any comments or questions or anything?

Yeah, we got, let's see, We got our favorite person.

Liz is in the chat.

Hey, Liz.

Liz says, hi, how is everyone doing?

Nice.

Good.

And then we got JoJo. JoJo says, a home should be a home, not a commodity. Housing has become a grift.

Interesting. Well, I think a home is a home.

Yes.

It also is a commodity. It's also, it's an investment. So I think both can be true. I think in order for there to be a home, it needs to get built. So if you know how to do that and just give it away, I think we've tried that here in California where we've tried to create properties for, you know, the unhoused and it just goes sideways.

Yeah. It was $600,000 per unit.

Yeah, it's like, uh, and the, um, all the nonprofits that are in charge of, you know, um, the, the cleaning up the, uh, you know, the unhoused or whatever, or helping them, it just becomes bigger and bigger and bigger and bigger and it never gets solved. Um, but yeah, I mean, a home is a home.

Yeah, I think that's the first thing you do is you look for a home for yourself, your family, and then after that, then you know you're looking. If you like real estate, you're looking to invest. Yeah, and so you go out and buy properties. Whether you hold on to them or flip them, that's really up to you. Yeah, or you can do land deals. There's so many different things you can do with real estate.

Yeah, but yeah, and and honestly, like the more I find out about it, it's allowed people to better. their lives by investing in real estate without maybe not even using your own money and then change the trajectory of your whole family's life by using that. I've talked to more and more people and there's no gatekeepers. There's nobody you got to suck up to. You can just start investing in real estate and like I said, change your family's life.

If I may add to it.

Yeah.

Real estate has been a way to accumulate generational wealth, right? It's something that you can hand over to your next, your offspring. You know, it's something they can utilize for bettering their lives and whether it's through by selling them or continuing to invest in them. So I think definitely real estate is a great way to, I mean, build your generational wealth and something that you can hand off to your offspring to continue, you know, having— making their lives better. And in India especially, you know, everybody invests in real estate, you know, and they believe that that is what they have to do for their kids. They have to buy a land or they have to buy a property, and that is something they want to hand over to the kids. And I definitely feel that now that perspective is something that, you know, a lot of people are definitely building on here as well. You know, people feel— I have a lot of clients who first bought their primary home, and then when they want to buy a bigger home, upside or downside, instead of selling their primary home, they convert it into a rental property because that is something they want to build on and, you know, build their assets and give it to their offspring.

Yeah, absolutely. And it's funny because when people— like, we talked about this before, like in the old cartoons or the old shows, like the real estate developer was like the bad guy.

You know what I mean?

It was just like they were coming in to take the resources and all that stuff. But the more you break it down, especially with landlords and all, and just in general, it's not all going to be BlackRock that's buying up every single single-family home. A majority of landlords are just mom-and-pop, Just like what you described, they have their primary.

Correct.

Now they're renting this out. Now they have an income. They actually have a retirement that they can live off of. And then they buy like one or two more. That's the majority of landlords. But everyone gets lumped in with Larry Fink and BlackRock. He's just like, ha ha ha ha, I'm going to buy every single home and everyone will be a renter for the rest of their life. So it's just educating yourself. That's all it is. But that that's a that was a that was a great comment.

I think that was a good question. Yeah, comment. Yes. We done?

Um, I think so.

Okay.

Yeah.

Producer's on the phone for some reason.

Well, you know, you got to talk to your friend Chad. He just chimed in saying there's no sound, and there is sound.

Oh, okay. Yeah. All right. Okay. She's checking her words.

Listen to Chad.

Yeah, she's no.

Sorry, having a panic attack.

Chad has baby brain right now.

Yeah, he's like texting me about a deal that's blowing up like while I'm in here.

So it's not much you can do.

Exactly. Um, that was fun. That was, that was great. Thank you guys for, um, you know, being our first virtual guest and, and then you coming in person. That was like really cool. And then the fact that you guys are sisters taking over the world is just another great thing. Yeah, really amazing.

We're gonna include Thank you for having us.

Yeah, of course. And, and thank you. Um, that was a really interesting topic, and I'll make sure to put everything in the show notes. And you guys, please reach out if you want to either get into land development, if you want to be a part of the next project, you know. Um, they, they got a lot of things on the horizon that you should, you should check out. So make sure you reach out to these girls and, and get in touch with them.

Thank you.

And then hopefully, uh, Prachi will be at the next meetup and continue to come, and then, you know, maybe meet future partners or whatever.

So definitely, yeah. So thank you for first having me at the meetup, and then thank you for having us on your podcast. This has been really good.

Thank you.

Absolutely. All right, you guys, um, we're actually gonna be going, going dark for a couple weeks here.

Couple?

3.

3. I know, 3 weeks. 3 weeks. Yeah, yeah. Producer and I are gonna be out of town, so no show.

But we don't know how to operate all these buttons and stuff. I barely know how to do it. I can barely answer my phone.

Um, but we will be back in November and, um, uh, same thing with the meetup. So if you guys want to come to the meetup, it'll be October 28th. Joe will be there.

Yeah, they're going to show me how to work the speakers, plug those in, the mic, and then I'll be all set and waiting for you to please show up.

Yep.

Please show up.

This is making me so sad right now.

Very cool. All right, you guys, thank you so much for tuning in and jumping in the chat. And, uh, we'll see you very soon.

Take care. Bye. If you want some more advice on real estate investing, reach out to us one-on-one.